BMW Group Maintains 2025 Targets Amidst Tariff Headwinds
Automaker Reports Solid Half-Year Performance Despite Q2 Challenges
The BMW Group remains on track to achieve its full-year financial objectives for 2025, demonstrating resilience despite significant tariff impacts in the second quarter. The premium automaker reported robust earnings and sales figures for the first half of the year.
Half-Year Earnings Exceed Expectations
For the first six months of 2025, the BMW Group posted earnings before tax surpassing 5.7 billion euros, with a Group EBT margin of 8.5 percent. This performance was achieved despite expected financial pressures from tariffs that significantly affected the second quarter.
All-Electric Vehicle Sales Surge
In the second quarter, BMW Group deliveries to customers saw a modest 0.4 percent year-on-year increase. All-electric vehicles (BEVs) played a crucial role, accounting for 18.3 percent of total sales. Electrified vehicles, including BEVs and plug-in hybrids, represented a substantial 26.4 percent of the sales mix.
Automotive Segment Navigates Market Dynamics
The Automotive segment delivered 621,000 vehicles in the second quarter, mirroring the previous year’s level. Sales experienced growth across most regions, with the exception of China. MINI, bolstered by full model range availability, reported a strong 33.2 percent increase in second-quarter sales globally.
Europe demonstrated particular strength with double-digit growth of 10.2 percent in Q2 retail sales, while the US market recorded a 1.4 percent increase. However, China saw a 15.5 percent decline in retail sales for the first half of 2025 compared to the prior year, though a sequential improvement was observed month-over-month within the second quarter.
Automotive segment revenues decreased by 8.4 percent to 29.4 billion euros in the second quarter. The segment’s EBIT margin stood at 5.4 percent for the quarter and 6.2 percent for the half-year, both falling within the company’s full-year guidance of 5 to 7 percent. These figures include an estimated 1.5 percentage point impact from tariffs over the six-month period.
EBIT Impacted by Tariffs and Pricing
The Automotive segment’s EBIT experienced a year-on-year decline of approximately 1.1 billion euros in the second quarter. Over half of this reduction is attributed to tariff impacts included in “Other” cost changes. Net negative effects from volume, model mix, and pricing contributed 300 million euros to the EBIT decrease in Q2.
Research and development expenses saw a reduction of about 200 million euros compared to the prior-year quarter. For the full year, R&D expenditure is projected to be below last year’s level and is expected to decrease further in the coming years. Selling and administrative expenses also declined by around 100 million euros year-on-year.
The substantial year-on-year headwind of 1.1 billion euros in “Other Cost Changes” is primarily due to increased tariffs in the US and EU anti-subsidy measures on Chinese electric vehicles, alongside reduced resale income from end-of-lease vehicles.
Free Cash Flow Remains Robust
The Automotive Segment generated approximately 1.9 billion euros in free cash flow during the second quarter. For the first half of 2025, free cash flow reached just over 2.3 billion euros, matching the previous year’s level. The company reaffirmed its full-year target of over 5 billion euros in free cash flow.
BMW Group’s strong free cash flow generation supports its shareholder return strategy, including a share repurchase program of up to 2 billion euros, scheduled for completion by April 30, 2027.
Financial Services and Motorcycles Segments
In the Financial Services segment, new contracts with retail customers slightly decreased by 3 percent year-on-year, influenced by the challenging Chinese market. However, new leasing business continued its dynamic growth, and the penetration rate for lease and loan offerings increased to 43.7 percent.
The Motorcycles segment saw deliveries decrease by 8 percent year-on-year in the second quarter, with segment revenues remaining on par with the prior year when adjusted for currency effects. The segment posted an EBIT of 136 million euros with a margin of 14.2 percent.
Outlook Confirmed Amid Evolving Tariff Landscape
BMW Group confirmed its full-year outlook for 2025, anticipating a Group earnings before tax at the previous year’s level. The automotive segment is projected to see a slight increase in deliveries with an EBIT margin between 5 and 7 percent.
The company is closely monitoring developments in China, including regulatory oversight and its potential impact on the automotive market. Regarding tariffs, an agreement between the US and the EU regarding tariffs is anticipated, potentially leading to partial reductions from August 1st. BMW Group now estimates a tariff burden of around 1.25 percentage points on the Automotive segment’s EBIT margin for the full year, including mitigation measures.
The company’s strategic positioning and flexible operations enable it to effectively manage the impact of tariffs and adapt to evolving market conditions. As planned, BMW Group is reducing R&D and capex spending from 2025, following peak investment levels in 2024. These cost-saving measures, alongside confirmed full-year targets, underscore the company’s commitment to premium profitability and stakeholder value.